BLS E-Services makes strong debut; shares list at 129% premium over IPO price
BLS e-Services Limited, a digital service provider offering business communication solutions to major Indian banks, made a strong debut on the stock exchanges on Tuesday. The shares of BLS e-Services were listed at ₹309 on the BSE, a premium of 129% over the initial public offering (IPO) price of ₹135 apiece. On the NSE, the stock opened at ₹305, up 126% against the issue price.
Post listing, BLS e-Services shares gained as much as 158% to hit a high of ₹348.40 on the NSE, while it touched a high of ₹347.90 on the BSE. The market capitalisation rose to ₹2,960 crore, with more than 17 lakh shares changing hands over the counter on the BSE in the first hour of trade.
According to analysts, the debut of BLS e-Services was better than Street expectations. Ahead of the listing, the stock was commanding a grey market premium (GMP) of ₹155 in the unofficial market, indicating the listing price to be around ₹290, a premium of 115% over the issue price.
“BLS e-Services has made a remarkable market debut. The company enjoys a long-standing partnership with leading banks, ensuring a stable revenue stream and recurring business. It operates in a high-growth industry driven by increased digitisation and financial inclusion initiatives. Additionally, the IPO is strategically priced, further enhancing its appeal to investors,” says Shivani Nyati, Head of Wealth, Swastika Investmart.
“With its strong fundamentals, positive investor sentiment, and promising outlook, the company is poised for a positive market debut. However, careful evaluation and risk management are crucial for every investment. So, investors who applied for the public offering for listing premium are advised to maintain their stop loss at ₹300 and wait for further upside, whereas those who have a medium-to-long-term perspective can also hold the stock,” Nyati adds.
The ₹311-crore IPO of BLS E-Services was subscribed by a whopping 162.47 times, which opened for subscription between January 30 to February 1, at a price band of ₹129-135 per share. The issue received an overwhelming response from retail investors, with the quota reserved for them receiving 236.53 times bids. The public issue was subscribed 123.30 times in the qualified institutional buyers (QIB) segment, and 300.05 times in the non-institutional investors (high net worth individuals).
As per the document filed with the SEBI, the company had reserved 75% of the shares in the public issue for QIB, 15% for NII, and 10% for retail investors. A discount of ₹7 per equity share was offered to BLS International shareholders.
Ahead of the IPO, BLS E-Services raised ₹125.92 crore from anchor investors by allotting 93.27 lakh shares at the upper IPO price band of ₹135 per share.
The BLS E-Services IPO was a completely fresh issue of 2.3 crore equity shares by the subsidiary of the listed business BLS International Services. Out of the IPO proceeds, the company will use ₹97.58 crore for strengthening technology infrastructure to develop new capabilities and consolidate existing platforms and ₹74.78 crore for funding initiatives for organic growth by setting up BLS stores. Besides, ₹28.71 crore will be utilised to achieve inorganic growth through acquisitions, and the remaining funds will be used to meet general corporate purposes.
Established in April 2016, BLS-E Services is a digital service provider that offers business correspondence services to major banks in India, including the State Bank of India (SBI), assisted e-services, and e-governance services at the grassroots level. For the first half of the fiscal ended September 30, 2023, the company's net profit stood at ₹14.68 crore, while revenue was at ₹158.04 crore. The company derived a substantial portion of its revenue from a single customer, SBI, contributing 59.75% to the top line.
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